Mutual Fund Load Definition and Analysis
Last Updated by WikiWealth
A mutual fund's load is one of the fees that mutual funds charge their customers to reimburse the cost of running a fund. WikiWealth breaks down the loads between front loads and back loads. Both are fees, but they occur at different times in a fund purchaser's life.
Front Load: This is the fee paid when someone purchases a mutual fund. The money typically goes to the broker of a fund as a commission for selling the fund. Front end loads reduce the total amount of investments going into a fund. For example, if an investor purchased $100 worth of a mutual fund and paid a front load of 5%, the total amount invested would be $95.
Back End Load: These fees are known as deferred sales charges. This is the fee paid when shares in a mutual fund are sold. The money typically goes to the broker of a fund as a commission.